PACADI INFORMATION

PROBLEM DEFINITION

The problem statement should be a clear, concise statement of exactly what needs to be addressed. This is not easy to write! Asking yourself the following questions may help:

1. What appears to be the problem(s) here?
2. How do I know that this is a problem? Note that by asking this question, you will be helping to differentiate the symptoms of the problem from the problem itself. Example: while declining sales or unhappy employees are a problemto most companies, they are in fact, symptoms of underlying problems which need to addressed.
3. What are the immediate issues that need to be addressed? This helps to differentiate between issues that can be resolved within the context of the case, and those that are bigger issues that needed to addressed at a another time (preferably by someone else!).
4. Differentiate between importance and urgency for the issues identified. Some issues may appear to be urgent, but upon closer examination are relatively unimportant, while others may be far more important (relative to solving our problem) than urgent. You want to deal with important issues in order of urgency to keep focused on your objective. Important issues are those that have a significanteffect on:
   1. profitability,
   2. strategic direction of the company,
   3. source of competitive advantage,
   4. morale of the company’s employees, and/or
   5. customer satisfaction.

The problem statement may be framed as a question, eg: What should the company do? or How can the brand improve market share? Usually the problem statement has to be re-written several times during the analysis of a case, as you peel back the layers of symptoms or causation.

Now, where are the problems being caused within this framework, and why?

1. Who is affected most by this issues? You are trying to identify who are the relevant stakeholders to the situation, and who will be affected by the decisions to be made.
2. What are the constraints and opportunities implicit to this situation? It is very rare that resources are not a constraint, and allocations must be made on the assumption that not enough will be available to please everyone.
3. What do the numbers tell you? You need to take a look at the numbers given in the case study and make a judgement as to their relevance to the problem identified. Not all numbers will be immediately useful or relevant, but you need to be careful not to overlook anything. When deciding to analyze numbers, keep in mind why you are doing it, and what you intend to do with the result. Use common sense and comparisons to industry standards when making judgements as to the meaning of your answers to avoid jumping to conclusions.

ALTERNATIVES
This section deals with different ways in which the problem can be resolved. Typically, there are many and these should be narrowed to three to five alternatives and being creative at this stage helps. Things to remember at this stage are:

1. Be realistic! While you might be able to find a dozen alternatives, keep in mind that they should be realistic and fit within the constraints of the situation.
2. The alternatives should be mutually exclusive, that is, they cannot happen at the same time.
3. Not making a decision pending further investigationis not an acceptable decision for any case study that you will analyze. A manager can always delay making a decision to gather more information, which is not managing at all! The whole point to this exercise is to learn how to make good decisions, and having imperfect information is normal for most business decisions, not the exception.
4. Doing nothingas in not changing your strategy can be a viable alternative, provided it is being recommended for the correct reasons, as will be discussed below.
5. Avoid providing only two other clearly undesirable alternatives to make the reasonable alternative look better by comparison.
6. Keep in mind that any alternative chosen will need to be implemented at some point, and if serious obstacles exist to successfully doing this, then you are the one who will look bad for suggesting it.

Once the alternatives have been identified, a method of evaluating them and selecting the most appropriate one needs to be used to arrive at a decision.

CRITERIA
A very important concept to understand, criteria answer the question of how you are going to decide which alternative is the best one to choose. Other than choosing randomly, managers employ some criteria in making any decision. Think about the last time that you make a purchase decision for an article of clothing. Why did you choose the article that you did? The criteria that you may have used could have been:

1. fit
2. price
3. fashion
4. color
5. approval of friend/family
6. availability

Note that any one of these criteria could appropriately finish the sentence;  the brand/style that I choose to purchase must…. These criteria are also how you will define or determine that a successful purchase decision has been made. For a business situation, the key decision criteria are those things that are important to the organization making the decision, and they will be used to evaluate the suitability of each alternative recommended.

Key decision criteria could be:

1. Brief, preferably in point form, such as: (note action verbs)
   1. improve (or at least maintain) profitability,
   2. increase sales, market share, or return on investment,
   3. maintain customer satisfaction, corporate image,
   4. be consistent with the corporate mission or strategy,
   5. within our present (or future) resources and capabilities,
   6. within acceptable risk parameters,
   7. ease or speed of implementation,
   8. employee morale, safety, or turnover,
   9. retain flexibility, and/or
   10. minimize environmental impact.
2. Measurable, at least to the point of comparison, such as alternative A will improve profitability more that alternative B.
3. Be related to your problem statement, and alternatives. If you find that you are talking about something else, that is a sign of a missing alternative or key decision criteria, or a poorly formed problem statement.

Students tend to find the concept of key decision criteria very confusing, so you will probably find that you re-write them several times as you analyze the case. They are similar to constraints or limitations, but are used to evaluate alternatives.

ANALYSIS

If you have done the above properly, this should be straightforward. You measure the alternatives against each key decision criteria. Often you can set up a simple table with key decision criteria as columns and alternatives as rows, and write this section based on the table. Each alternative must be compared to each criteria and its suitability ranked in some way, such as met/not met, or in relation to the other alternatives, such as better than, or highest. This will be important to selecting an alternative. Another method that can be used is to list the advantages and disadvantages (pros/cons) of each alternative, and then discussing the short and long term implications of choosing each. Note that this implies that you have already predicted the most likely outcome of each of the alternatives. Some students find it helpful to consider three different levels of outcome, such as best, worst, and most likely, as another way of evaluating alternatives.

DECISION

You must have a decision/recommendation based on your analysis! Marketing managers are decision-makers; this is your opportunity to practice making decisions. Give a justification for your decision.  (Check to make sure that it is one and only one) of your Alternatives and that it does resolve what you defined as the Problem.  Be sure to explain why the decision made is the best fit to the criteria.

IMPLEMENTATION

This is an important step to bring your recommendation to life.  Many decisions fail on the basis of poor implementation rather than a poor decision.  What are the key steps to implement your recommendation?  Do you need to add more sales people, change the advertising, focus sales efforts against a particular customer segment, increase advertising expenditures, restructure the marketing department, etc? You need to outline your implementation plan including   sequence and timetable, expected competitive reaction, metrics to measure success, unplanned for costs, and any risks in the plan.